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December 3, 2019

Why Cyber Must Be a Focus for SMEs

Summary:

The days of hackers focusing on major businesses have given way to a new era for cybersecurity. Small businesses are the new target.

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Small business cybersecurity must be taken seriously. The days of hackers focusing on major businesses have given way to a new era. Small businesses are the new target. The Verizon 2019 Data Breach Investigations Report found that 43% of data breaches hit small businesses. The next most common industry for breaches – the public sector – was hit by just 16% of security events. Small businesses are a high-priority target for attackers, and a Ponemon Institute study found that 67% of small businesses were hit by a cyber attack in the year prior to its study, which was released in late 2018.

These are tough statistics for small business owners. The problem doesn’t stop here. Small businesses aren’t just targets; they are also less likely to be able to handle the costs of a data breach. A study from IBM Security and the Ponemon Institute found the average total cost of a data breach was $3.9 million in 2018. That figure has been rising over the past few years.

Small business cybersecurity is a mission-critical situation. It’s something that poses real challenges for small business owners who lack the resources to invest in robust IT systems.

Understanding the Scope of the Cybersecurity Threat

The high costs of a data breach are influenced by major security incidents affecting large corporations. You may not think you have almost $4 million to lose in a cyberattack because you simply don’t have that kind of money in the first place. But that’s the problem. You may not be hit by a hacker trying to steal highly regulated data, leading to the kinds of fines that cause huge costs. But how much cash do you have lying around? If you’re hit by a ransomware attack – a security event in which a hacker uses malware to encrypt your data so you can’t access it and demands a ransom – do you have the funds to respond? Even a $50,000 ransom can have a huge impact on a small business.

See also: Hidden Dangers for Cybersecurity  

Dealing with the Costs of Attacks

The costs that come with a data breach stem from a variety of sources. If you’re lucky, you won’t lose any information, or have it stolen. For example, two types of common attacks don’t steal data; they just kill productivity.

The first of those is ransomware. The cost here comes from lost productivity while data is inaccessible, and the price of paying the ransom to recover your data. The second is distributed denial of service (DDoS), an attack in which servers are overloaded by constant attempts to access your website. This makes it impossible for legitimate customers to interact with you.

When data is stolen, the costs escalate, particularly if customer information is lost. In this case, you often have to:

  • Cover the costs of credit tracking for those affected by the breach.
  • Deal with regulatory fines if it’s found that you weren’t in compliance with an industry standard.
  • Face lost trust from customers, something that often hurts the bottom line.
  • Scramble to deal with the source of the attack and fix any IT problems that existed.

Whether you’re hit by something like ransomware or face a full data breach, the costs can escalate quickly, to the point that a single security event can put you out of business. Investing in small business cybersecurity is critical in dealing with these situations.

Looking at Common Attack Types

Cyber criminals are constantly shifting their methods as they identify vulnerabilities. They’re also aware that many small business cybersecurity efforts are lacking. This has made small businesses targets for a wide range of attack types, including:

  • Phishing schemes that use legit-looking emails to trick users into downloading malware.
  • Account takeovers in which criminals use stolen login details to access user accounts and steal private data.
  • Social engineering efforts that allow hackers to pose as an account-holder to gain access to sensitive data.

None of these attack types is technically demanding. They are cheap for hackers to act on. As such, criminals can easily attack small businesses in multiple ways. The hackers just sit back hoping that one method will get through. The Verizon study found that almost 40% of all cyber attacks stemmed from organized crime groups. Hackers are working in smarter, more efficient ways. Small business cybersecurity tactics need to shift as a result.

Exploring Why Small Businesses Are Targets

Imagine you’re a hacker. You’re looking for a target that will give you valuable data you can sell to third parties. Just about every business today is based heavily on digital resources. Why would you target highly defended large corporations when small businesses often have valuable data, but fewer defenses?

See also: 4 Ways to Boost Cybersecurity  

This logic is shaping the modern small business cybersecurity sector. Small businesses typically lack strong security measures to identify threats and safeguard data from intruders. Hackers can send phishing emails to thousands of business email addresses at minimal cost. All they need is to have a few people fall for the scam, and hackers have access to company data and systems.

Overcoming the Resource Crunch 

With hackers today, a single data breach could be expensive enough to put you out of business. With this in mind, think about making some IT updates, training staff and using similar strategies to bolster your defenses. Whether you tweak your budget to create space for cybersecurity spending or seek funding to boost your capabilities, it’s time to start rethinking your defenses. Take action before your business becomes the next target.

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About the Author

Ben Gold is president of QuickBridge, a privately held financial services firm providing “small business loans” and short-term working capital funding solutions for small to medium-sized businesses nationwide.

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